Bull Market

To Manhattan last week went two eager makers of business machines with audacious plans to challenge the International Business Machines Corp. in IBM's home market. The foreign businessmen: President Joseph Callies, 50, and General Manager Georges Vieillard, 64, of France's fast-rising La Compagnie des Machines Bull. Barely known outside France ten years ago, Machines Bull manufactures a line of punch-card and sorting machines topped off by computers. Recently it pulled abreast of IBM in many markets of the Continent, is now the biggest computer maker outside the U.S.

Since 1950, Machines Bull has had a contract to sell in the U.S. under the trade name of Remington Rand. But sales never amounted to more than $3,000,000 a year. The company believes it can readily market $40 million worth of its computers and other equipment under its own name if a big sales push is made. Last week Callies and Vieillard dickered with Remington Rand, whose contract is expiring, and other U.S. companies for a deal to make an all-out push.

David v. Goliath. In daring to challenge Goliath IBM, Callies and Vieillard know that they are still in point of present gross (estimated for this year at $35 million) a pretty small David. But they count on the fact that they are showing a fast sales-growth rate. Annually since 1946, their exports have risen 25%. Last year they shipped $18 million worth of equipment to customers in 42 countries. Of that, $9,000,000 went to countries in the dollar area.

Automatic Foreman. Machines Bull was founded in 1931 by Vieillard, then an adding-machine-company engineer. He bought the patent rights to a type of punch-card machine, which had been willed to Oslo's Cancer Institute by Norwegian Inventor Fredrik Bull. With only $140,000 in capital, Vieillard soon needed more financing, sold a 70% interest in the company to the wealthy Callies family (paper mills), closely related to the Michelin and Citroen family. With new capital, the company plunged into research, soon turned out a tabulator capable of writing 150 lines a minute when other tabulators were only half as fast. During the war its engineers designed a postwar line of advanced electronic computers, the first of which, the Gamma 3, appeared in 1951.

Using germanium diodes instead of tubes," the Gamma 3 proved a versatile workhorse computer, led Machines Bull engineers to design the new Gamma 60 line. The Gamma 60s, coming out in January, are the last word in "simultaneous" computer design, are as far ahead of the Gamma 35, says Callies, as a pipe organ is ahead of a flute. Costing $1,000,000 to $3,000,000 each, depending on the number of components used, the 60s can make 10,000 additions, 3,333 multiplications, 1,666 divisions and 10,000 mathematical decisions each second. One part of the computer even acts as a foreman, assigns work to other parts as they finish their tasks. Thus the machine can handle scores of unrelated problems at one time, ranging from making out a payroll to calculating a trajectory to the moon.

On the Paris stock market Machines Bull stock has lately been tracing a spectacular trajectory of its own. From $118 a year and a half ago, the 657,600 shares of Machines Bull jumped to more than $260 per share in September. The company recently announced plans to raise more capital by issuing 328,800 new shares. Shareholders were given rights to buy new shares, and the price jumped to $366. Today Machines Bull is valued on a stock basis at $240 million, among the top French companies.

This file is automatically generated by a robot program, so reader's discretion is required.